The second wave of the Covid-19 pandemic has taken away a large part of the garment business with the recurrence of lockdowns, subdued retail sales, and labour migration. The entire industry both export as well as domestic-oriented, faces a major sustenance challenge. The Indian apparel market in 2020-21 was estimated to have shrunk by ~30% to reach approx. US$ 55 billion (~Rs. 4 Lakh Crores) from US$ 78 billion (~Rs. 5.8 Lakh Crores) in 2019-20. This 30% loss in sales is actually estimated to have shrunk the manufacturing by an additional 10-15%, since most of the brands have not put in fresh orders and have relied on their deadstock or sale surplus goods. Nonetheless, this also comes as a positive sign for the garment manufacturers, considering that brands will have fresher orders whenever the retail sales pick up.
However, the biggest challenge for the Indian apparel manufacturers comes from Bangladesh. Over the last 5 years, India’s apparel imports from Bangladesh have grown at a massive CAGR of 18%, this is considering the 25% fall in imports in 2020. If we look at the import data from 2015 to 2019, the imports have grown at a CAGR of 32%, while growing from US$ 132 million in 2015 to US$ 399 in 2019. The reason for Bangladesh’s success in Indian market is solely their ability to manufacture at competitive costs. Even with India’s manufacturing might, the domestic manufacturers are struggling to keep the costs down. The migrant labour crisis can further pave a difficult path for the manufacturers in the immediate months post this second wave.
The question then arises, Can India beat Bangladesh at its own game? Given the diverse nature of manufacturers across India, there is no simple answer. However, there are a few critical mistakes that manufacturers across India can avoid regardless of their production strength and locations. Avoiding these mistakes could make a garment manufacturing unit significantly more competitive and the best part, they do not come with a heavy price tag too. In order to be ready for the post-Covid world, Indian garment manufacturers should look forward to avoiding these mistakes:
1. Flawed Factory Design and Machinery Layout
Creating factory layout is one of the most critical parts of setting up an apparel manufacturing unit. The layout is not just a representation of the shop floor in terms of infrastructure and machinery but is also important for planning of material and manpower movement. With the ever-changing orders and requirements of the buyers, the manufacturers resort to changing line sizes, machines and material movement to suit the product being manufactured. The current shortage of orders provides a convenient time for all the manufacturers to observe their shop floor layouts and perform trial runs.
The development of an efficient plant layout results in smooth work flow across the production process, improved production efficiency and ensures 10-12% space saving. A well-developed layout also incorporates international compliance requirements such as Safety, Health and Environment (SHE) norms and results in a visually appealing factory.
2. Ignorance of Modern Industrial Engineering and Quality Control Methods
The primary benefit of modern industrial engineering is to make work as easy as possible while keeping the overall cost factors to minimum. Once the work is simplified for the workers it has a domino effect on the entire organization. The workers may be able to do more work in the same time as they did without the application of IE, thus increasing the overall productivity of the work. The manufacturers can benefit from this cost saving which in turn would help them in offering the buyers a much better price.
In addition to the modern industrial engineering, the presence of an efficient quality control system is necessary to maximize the results. It is a continuous process that touches everything from purchasing to manufacturing to distribution and requires attention at all the processes in the value chain to meet the product standards. An absence of a decent quality control system and industrial engineering can lead to an inconsistent production and a fall in the productivity, which at the current business scenario could be fatal for the business.
3. Absence of Information Capture and Communication
Garment manufacturing involves co-working of various factors and hence requires a system for continuous coordination between the different departments in the organization. It becomes necessary for the companies to have a communication system in place to inform and update the various entities across the process flow regarding any delays or changes. Implementing a Production Control/ ERP/ MIS/ Project Management solution in the company helps in easy communication and early detection of such delays.
In our industry, recorded information is not necessarily structured, and the flow of information is often delayed due to physical movement of data through files and folders. This results in gaps in the information flow which results in delayed shipments. For example, if the fabric procurement manager doesn’t communicate a delay in fabric delivery to the cutting manager, the cutting manager would continue with his existing production plan. However, as the fabric has not been received as per the planned time, it would lead to increase in the idle time of the cutting floor and eventually a delay in the subsequent processes.
Stay tuned for the Part 2 of our series where we discuss about three other critical mistakes that can be avoided by indian garment manufacturers post covid.
Wastra, an initiative by Wazir Advisors helps clients avoid these mistakes and establish an engineered factory or re-engineer the existing factories to bring it closer to an engineered one. We believe in establishing a set-up with trained manpower, optimum technology, ideal infrastructure and rationally designed processes. Given the supportive government policies and India’s strengths as an apparel manufacturer, we strongly believe that the opportunity for apparel manufacturers is beyond question. It is just a matter of manufacturing with an efficient system.